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Mexican peso slips as risk aversion lifts the US dollar
USD/MXN was quoted around 17.43 after hitting a low near 17.37, helped by firmer US yields and hawkish Fed commentary amid Middle East tensions.
The Mexican peso fell by about 0.30% on Thursday as investors turned more risk averse, a move that supported the US dollar amid escalating Middle East conflict and higher energy prices, according to FXStreet.
In the FX market, USD/MXN traded around 17.43, after a low near 17.37. The article linked the dollar’s rebound to elevated US Treasury yields, with the 10-year Treasury note yield cited at 4.569%, up 2 basis points.
FXStreet also pointed to a round of positive US data, including retail sales rising 0.2% month over month in June and initial jobless claims of 208K for the week ending July 11, which came in below forecasts. It added that Fed regional bank presidents Lorie Logan and Jeffrey Schmid delivered hawkish messages, with Logan calling for a slightly higher policy rate and Schmid expressing concern about persistent inflation.
On the Mexico side, FXStreet said there was no major economic data, while negotiations between Washington and Mexico continued. It noted that US and Mexican officials are set to meet for a third round of formal USMCA talks in Mexico City next week, with Banxico expected to hold rates at 6.50% and market expectations for a Fed increase of 25 basis points that would narrow the interest rate differential.